Agri1 128

Principles of Agricultural
Entrepreneurship & Marketing
Prepared by:

DENNMARK A. CENTENO
Instructor
dennmarkcenteno@gmail.com
0967-674-3152
 Lesson 1
Agricultural entrepreneurship refers to the
application of entrepreneurial
2
principles and practices
within the agricultural sector. It involves the individual or
groups who identity and pursue opportunities to create
value through innovative approaches, risk taking, and
efficient management of the resources in agriculture
related activities
Agricultural entrepreneurs play a crucial role in
transforming traditional farming into, sustainable and
profitable ventures
Lesson 1.1 Key components of Agricultural Entrepreneurship

1. Innovation 3
 Key components of Agricultural Entrepreneurship
Lesson 1.1
2. Risk Management 4

Human
Resources

Climate Market
change and price
Risks in
Agriculture

Financial Political
risk
 Key components of Agricultural Entrepreneurship
Lesson 1.1
3. Resource optimization 5
 Key components of Agricultural Entrepreneurship
Lesson 1.1
4. Market orientation 6
 Importance of entrepreneurship
Lesson 1.2
1. Economic development 7
 Importance of entrepreneurship
Lesson 1.2
2. Innovation & technology Adoption 8

Categories of adopters
Adaptation process

Adaptation

Trial

Evaluation

interest

awareness
 Importance of entrepreneurship
Lesson 1.2
3. Food security 9
 Importance of entrepreneurship
Lesson 1.2
4. Environmental sustainability10
 Importance of entrepreneurship
Lesson 1.2
5. Diversification of income
11
source
 12
Development
is a process ,while growth is a product
is input while growth is output
Views on development:
 as purely economic growth and the encompassing other
aspects. Changes accompanying development are political,
educational, religious, familial, and stratification.
 as a process involving both modernization and
westernization. Modernization is the process of emulating
the characteristics of another “superior” culture. Forms of
modernization are: ancient –terms are hellenization and
sinicization, and prevalent or contemporary –
westernization.
 13

1. Define what is Agricultural entrepreneurship.

2.6 Enumerate the adaptation process
7- 12 enumerate the different category of adopters and
mention their characteristics
13- 15. explain the importance of entrepreneurship
 14

Development (cont’d)
 Economic development refers to a progressive process
of improving human conditions by eliminating or reducing
poverty, unemployment, disease, illiteracy, injustice and
exploitation.

 Rural development is a process through which rural

poverty is alleviated by sustained increases in productivity
and income of low income workers and households.
Human Development 15

Is the sum of all efforts to improve

the situation of people in all parts of
the world
 Its end goal is to expand the choices
of people
The first step t attain this is to
provide people with an enabling
environment that facilitates freedom
from basic needs and wants
 16
Entrepreneurship and Human Development
 Poor countries have resorted to many alleviating measures as
they propel themselves to the league of rich countries
 sending their citizens to work in developed economies.
 enabling the environment for the micro, small medium
enterprises (MSMEs)
 poor countries are likely to attain a higher level of human
development
 The literature on this subject and the documentation of
MSME successes all point out of facilitating MSME
development and enabling those behind MSMEs – that is,
their entrepreneur-owners – will raise the country’s level of
development
 17
How Countries Grow and Become Rich?
 Economic development is brought
about by an “invisible hand”
 According to Adam Smith,
development is brought about
by individuals who set out to
produce valuable goods and
services for their personal gain
and profit
 Any country can be made to
prosper with little or no effort
because economic development
happens naturally
 18
How Countries Grow and Become Rich? (cont’d)
 Economic development is brought about by individuals who
like to create and get things done not primarily for profit but
for more noble motives
 Joseph Schumpeter said that economic growth is initiated
by enterprising men and women who produce not
necessarily for personal profit but for nobler, less selfish
reasons
 These men and women promote new goods and new
methods of production, use new sources of materials and
explore new markets because they: 1) find enjoyment in
creating or producing; 2) feel a sense of fulfillment in
getting things done; and 3) like to achieve for
achievement’s sake
 19
How Countries Grow and Become Rich? (cont’d)
 A nations wealth will increase only if government regulated
all the nation’s commercial interests
 The theory of mercantilism was the first major economic
theory known in the world.
 Based on the idea that a nation’s wealth will increase
only if government regulated all the nation’s
commercial interests
 Holds that wealth of a nation can be measured by its
ready supply of capital, generally held in the concrete
form of gold or silver
 Global supply of wealth is a fixed amount, and that
therefore, any gain of wealth by one nation must
necessarily represent a loss by another
 20

How Countries Grow and Become Rich? (cont’d)

 Human history is a class struggle between workers and

employers
 Karl Marx disagreed with Adam Smith and the laissez
faire theorists
 Free enterprise would lead to increasingly severe losses
and would eventually bring about revolution by the
workers
 They called for an economy where the government owned
all the property and distributed everything equally among
all the people through socialism
 21
How Countries Grow and Become Rich? (cont’d)
 Although the theories differ, they share the common idea
that economic development is attributable to the work of
men and women who produce and create goods that
benefit the larger community and society
 These men and women are called
 22

ENTREPRENEUR
French word “entreprendre” which simply means
undertake
 Early entrepreneurs provided men and materials
needed by feudal lords to wage war against their
enemies
 The emergence of entrepreneur or entrepreneurship
at the height of the feudal conflict in France is an
indication that the kind of activity is “provision of
services”
 There were also notions that the term can also be
translated to mean “between-taker” or “go-between”
 23

ENTREPRENEUR
 According to Loyd Shefsky
 Entre means enter, pre means before, neur means nerve
center
 An entrepreneur is someone who enters a business – any
business in time to form or change substantially that
business nerve center
 24
ENTREPRENEUR (CONT’d)
One who learns/knows uncertainty, buys labor and
materials and sells products at uncertain prices
(Cantillon)
An innovator (Schumpeter)
Always searches for changes, responds to it and exploit
it as opportunity (Peter Drucker)
Shifts economic resources from an area of lower
productivity to an area of higher productivity and
greater yield (Say)
Organizes, operates and assumes the risk of business
ventures (American Heritage Dictionary)
 25

ENTREPRENEUR (CONT’d)
Has ability to see and evaluate business
opportunities, to gather the necessary resources and
to take advantage of them and to initiate appropriate
action to ensure profit (Geoffrey Meredeth)
An actor and a person who managed large
production project (Orcullo)
Sees the needs and answers the needs and demands
of its community for profit, while a businessman
usually puts up a business solely for profit (Espino)
 26
Evolution of Entrepreneurship
The concept of entrepreneurship was first
established in the 1700s
To some economists, the entrepreneur is one who is
willing to bear the risk of a new venture if there is a
significant chance for profit.
 Others emphasize the entrepreneur’s role as an
innovator who markets his innovation.
Still other economists say that entrepreneurs
develop new goods or processes that the market
demands and are not currently being supplied.
 27

ENTREPRENEURSHIP
 The capacity for innovation, investment and expansion in
new markets, products and techniques (Prof. Nathaniel
Left)
 Refers to the economic activity of a person who starts,
manages and assumes the risks of a business enterprise
 The process of creating something different with value by
devoting the necessary time and effort assuring the
accompanying financial, psychic and social risks and
receiving the rewards of monetary and personal
satisfaction (Hisrich and Peters)
 28

ENTREPRENEURSHIP (cont’d)

The key concept of defining the term is innovation

 Innovation
introduction of a new method, custom, devices, etc.
 Includes departures from the previous procedures
to eliminate unnecessary work or avoid duplication
-INVESTMENT – the laying of money for profit for
the purchase of some type of property
 29

ENTREPRENEURSHIP (cont’d)

A dynamic process of innovation and new venture

creation through dimensions like individual,
organization, environment and process and aided by
collaborative network in government, education and
institution
 30

EXAMPLES of SUCCESSFUL INNOVATIONS

Cordless microphone
Microwave oven
Cellular phone
Karaoke music appliance
Laser in the treatment of eye disease
Use of computers in the design of buildings by
architects and civil engineers
 31

Differences of an entrepreneur
BEFORE and NOW

Before After
1. Profit-oriented 1. Customer-oriented
2. Faith and luck 2. Systematic planning
3. Ideas only 3. Factual information, research
oriented, implementer of ideas
4. Competitors were seen 4. Competitors are regarded as
as enemies partners and linkages
 32

Small and Medium Enterprises

play a critical role in the economic growth and
industrial development of developing countries
worldwide
contribute substantially to the economy both in
terms of number of enterprises and workers.
given the rising globalization trend and increasing
economic integration in East Asia, they could serve
as potential suppliers of outsourced
parts/services/raw materials
 33

Small and Medium Enterprises (cont’d)

 any improvement in their capabilities is important in both
economic and social aspects
 strengthening the linkages between multinational
corporations and SMEs can yield many benefits to the
country
 increasing value added and employment
 diffusion of new technology, skills and management,
 and access to world markets
 promote local supplier clusters, which are important in
enhancing SME competitiveness and productivity
 34

PHILIPPINE Economy
 Unemployment
 Biggest economic problem
 Creates social problems such as housing, health and
sanitation, prostitution, robbery and other related crimes

 Job generation
One of the most important contribution
of entrepreneurship
 35

National Government
 One of the main thrusts is to create the spirit of
entrepreneurship among the poor
 Extends financial and technical assistance to small scale
industries, especially to micro-business enterprises
 Policies, laws, regulations and procedures should be
simplified to ease the way for new entrepreneurs as they go
through the administrative complexities of starting a
business
 How Entrepreneurs Make
36 a Country Rich and
Self-Reliant
 They provide the goods and services which members in the
community or group need but cannot provide themselves
 Entrepreneurs provide food on our tables, clothes on our
backs, utensils for our kitchen, supplies for our offices, fuel
for our cars and machines, medicines for recovery from injury
or sickness, and grocery items for our daily consumption
needs
 Entrepreneurs earn profits that help the economy grow
 When there is demand for goods and someone supplies it,
money changes hands and profits are made
 The more goods demanded and supplied, the bigger the
profits and the more money circulating in the economy
 37

How Entrepreneurs Make a Country Rich and

Self-Reliant
 The entrepreneur provides jobs
 As he produces goods and services, he employs other people
and pay them salaries and wages
 This income gives workers purchasing or buying power and
enables them to be more active participants in the economy
 Entrepreneurs who succeed and grow help other entrepreneurs
succeed and grow, too
 Entrepreneurs depend on other entrepreneurs for their raw
materials, parts and supplies
 38

How Entrepreneurs Make a Country Rich and

Self-Reliant
 As more entrepreneurs create and produce in the economy,
the country depends less on imports, or goods that come
from other countries
 Our dollars stay in the country instead of going out when
we pay for foreign imports
 Entrepreneurs help develop small towns and cities and thus
stem the migration of rural people to big cities
 Entrepreneurs set up business establishments in towns
and employ the townspeople
 39

What an Entrepreneur Does

 Perceives opportunities in the environment
 An entrepreneur sees business ideas and opportunities in every
human need, want or problem
 Take calculated risks
 The entrepreneur studies the risks involved in implementing
business ideas
 When an entrepreneur calculates the risks of a business, he
estimates the odds for success and failure
 Produce and use capital
 A person who starts a business enterprise must have “something” to
begin with
 Real entrepreneurs have a way of overcoming lack of capital and
other obstacles to business success
 40

What an Entrepreneur Does (cont’d)

Introduce innovations
 Innovation implies newness originality or creativity, variation or
uniqueness
 An innovative person is open to change
Organize the business
 An entrepreneur must efficiently utilize all inputs (money, men,
machines, materials, methods, markets and moment)
Make plans and decisions
 Planning is an advantage
Make profit
 Profit is the financial reward a person gets from the money, time and
effort he puts into a business venture
 41

Rewards of Being an Entrepreneur

 Make money
 When you have a business, you get a chance to earn money
 Be your own boss
 As an entrepreneur , you own the business, so nobody tells you
what to do
 Express creativity
 Any kind of business begins as an idea of an entrepreneur
 Gain self satisfaction
 A business allows a person to express creativity, to
demonstrate capability in securing and managing resources,
and to face and overcome challenges
 42

Risks of Being an Entrepreneur

 The risk of failure
 By nature, a small business is prone to risks and
possibilities of failure
 Long hours of hard work
 Entrepreneurship is often about creating something new
and it requires a lot of time and effort
 Unwanted responsibilities
 Not all entrepreneurs are prepared for responsibilities
that come with being in a business